White House Ceremony Celebrates SGR Repeal Victory

Physicians and lawmakers gathered at the White House April 21 to celebrate a major legislative achievement after more than a decade of work to reform Medicare payments to physicians.

AAFP President Robert Wergin, M.D., thanked President Obama for his leadership at a White House ceremony to mark repeal of the Medicare sustainable growth rate.

AAFP President Robert Wergin, M.D., of Milford, Neb., joined the ceremony that President Obama hosted to salute physician groups and legislators for repealing the Medicare sustainable growth rate (SGR) formula and for ushering in a new era of physician payment reform.

Obama delivered a speech thanking Republican and Democratic leaders for coming to agreement. Given the high level of bipartisan cooperation required to pass the law, a host of senators and representatives was on hand to hear the president's praise.

"The family physicians of America thank you for your leadership, and we'll move forward to work with you," Wergin told AAFP News he said to Obama.

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President Obama hosted an event in the White House Rose Garden to celebrate repeal of the Medicare sustainable growth rate (SGR).

AAFP President Robert Wergin, M.D., was on hand to thank Obama for his leadership.

Legislators said the loud voice of physicians who advocated SGR repeal contributed to strong bipartisan support for the legislation.

"Thank you for your support," Obama responded.

The reception was held in the Rose Garden, a site typically reserved for announcements about major political achievements. The symbolism was not lost on Wergin.

"It shows the significance of the legislation by holding the event in the Rose Garden," he said. "This was very big. All physician leaders who contributed to the solution of SGR repeal were there."

Obama noted that before legislators succeeded with repeal, they had passed 17 patches, or "doc fixes," during the past 12 years to avoid spending cuts that were part of the SGR. Wergin said one factor that might have contributed to success this year was increased access to care for Medicare-eligible seniors. An estimated 10,000 baby boomers become eligible for Medicare every day.

"This is probably the first major health care bill to pass since the ACA (Patient Protection and Affordable Care Act), and it was bipartisan," he said. "The SGR is laid to rest. Now we have a predictable payment schedule for Medicare and we move to a new model of value-based payments."

For 12 years, the AAFP and other medical organizations had sought the repeal of SGR and its replacement with a more stable form of Medicare payments to physicians. Legislators said they heard the voice of medicine loudly, which brought the chance of passage to its highest point this year. Lawmakers had what Wergin called "SGR fatigue."

Rep. Michael Burgess, M.D., R-Texas, who sponsored the bill and attended the White House ceremony, talked earlier this year about how the SGR consumed a substantial amount of his time as a legislator.

The legislation included several provisions -- notably, increasing the federal deficit, raising Medicare premiums for some seniors and extending the Children's Health Insurance Program (CHIP) for two years -- that required compromise from both parties.

"This bill had enough in it for everybody -- physicians, Democrats, Republicans, community health clinics, teaching health centers," Wergin said. "They all had something to gain in this. That is what made it acceptable."

But the measure faced a critical deadline. A one-year patch that Congress passed in 2014 expired on March 31, and the SGR called for steep payment cuts unless lawmakers acted.

"It takes away the sword of Damocles and the possibility of a 21-percent cut," Wergin said.

The 95-page bill includes more than reform of the Medicare physician fee schedule. Funding for CHIP, community health centers and the National Health Service Corps was extended for 2016 and 2017. The bill also included $60 million a year for two years for the Teaching Health Center Graduate Medical Education program.

Under the new legislation, the current payment rate in the Medicare physician fee schedule will rise 0.5 percent on July 1, 2015, and another 0.5 percent each year through 2019. The updated payment will not change from 2020 through 2025. However, physicians in alternative payment models, such as patient-centered medical homes, will earn a 5 percent update in payment rates each year.

"It allows for a period of transition from fee-for-service," Wergin said. "It's not a direct movement to value-based payment. Your practice will have a predictable flow of income."

The next step for the AAFP, Wergin said, is pushing policymakers to ease the administrative burden physicians face on quality measurement and to improve physician payment.

Wergin said he has spoken with a number of members about the scheduled payment increases, and he tells them that the new legislation is the best compromise for physicians.

"My response is, 'What's your alternative?'" Wergin said. "If this didn't get passed, there probably would have been serious reductions in payments."